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Thursday, 25 November 1965


Mr WHITLAM (Werriwa) .- Mr. Deputy Speaker,it has proved most difficult to conceive and deliver restrictive practices legislation in the Liberal Party. The period of gestation has been so excessive that the father of the legislation has left the House to become Chief Justice of Australia. The foster father - the present AttorneyGeneral (Mr. Snedden) - has had to accept responsibility for a much more puny child than numerous progress bulletins had led members of the Parliament and the community to expect.

The Government's intentions in this matter were announced in these terms in the Governor-General's Speech at the opening of Parliament in March 1960 -

The development of tendencies to monopoly and restrictive practices in commerce and industry has engaged the attention of the Government which will give consideration to legislation to protect and strengthen free enterprise against such a development.

Even then there would have been no promise of restrictive practices legislation had it not been for the unanimous recommendation of the Joint Committee on Constitutional Review in 1958 and again in 1959. The Attorney-General found two proposals at least by that Committee to be irresistible. The arguments were unanswerable. There was need in Australia for a national and comprehensive law on companies and on restrictive practices. When the Government made its announcement people were reassured. Nobody knew better than Sir Garfield Barwick the loopholes and the subterfuges of big business. No-one was better qualified to plug those loopholes and to ban those subterfuges. The best poachers, it was thought, often proved to be the best gamekeepers.

It was at this stage that Sir Garfield Barwick made his first mistake. The Committee had recommended referendums to give the Commonwealth Parliament powers to pass complete laws on companies and restrictive practices. Sir Garfield determined to introduce Federal laws and to ask the States to pass complementary laws. In aiming to by-pass an expresssion of the popular wishes at a referendum he delivered himself into the hands of his Cabinet rivals and their backers, who have been unable to withstand six years lobbying in this and the State Parliaments.

It should not have been difficult to frame restrictive practices legislation or monopolies legislation. This Bill does not refer to monopolies in its title. It refers merely to trade practices. There have been restrictive trade practices laws in the greatest - oldest - federation - the United States of America - since the Sherman Act of 1890. Since the Second World War such laws have been passed in Britain in 1948, in Canada in 1951, in New Zealand in 1958, in the European Coal and Steel Community in 1951 and in the European Economic Community in 1957.


Mr Snedden - The legislation in Canada preceded that of the United States.


Mr WHITLAM - Not the Sherman Act.


Mr Snedden - The Deputy Leader of the Opposition should look at the history of this matter.


Mr WHITLAM - The Attorney-General says that there has been even older legislation in the Canadian federation than in the United States. In that case there has been more than three-quarters of a century of experience of this form of legislation in federal systems.

But to return to the period after the last war, apart from the countries and communities I have listed, such legislation has been enacted in Denmark, France, Japan, the Netherlands, Norway, South Africa, Sweden and West Germany. Since 1906 there has been an Australian Industries Preservation Act, modelled on the Sherman Act. Last year and this year the High Court gave several decisions which show that the Act has much more force than was usually thought. It is to be deplored that the Bill we are now debating should now repeal the relevant sections of the Australian Industries Preservation Act. Let me refer to section 4 of the Act, which has been declared valid by the High Court. It reads - 4(1.) Any person who, either as principal or as agent, makes or enters into any contract, or is or continues to be a member of or engages in any combination, in relation to trade or commerce with other countries or among the States -

(a)   in restraint of or with intent to restrain trade or commerce; or

(b)   to the destruction or injury of or with the intent to destroy or injure by means of unfair competition any Australian industry the preservation of which is advantageous to the Commonwealth, having due regard to the interests of producers, workers and consumers, is guilty of an offence. (2.) Every contract made or entered into in contravention of this section shall be absolutely illegal and void.

Apart from creating offences and nullifying contracts the Act gives individuals affected by such illegal practices the right to sue for and recover treble damages for the injury. In February last year the High Court unanimously held that this section was a valid exercise of this Parliament's powers. Many people say - and it is not too cynical to believe - that it was from this stage, February last year, that the Government's interest in restrictive practices was galvanised. From that stage it was determined that this Act would have to be repealed. That is, an Act which admittedly had been thought to have defects was found to be perfectly valid - to have teeth. Thereupon the Government decided to repeal it.

The Bill we have before us is not yet established. At least, one would think that the Australian Industries Preservation Act should not be repealed until it has been established that the Bill we are debating is equally effective. But, even so, the Australian Industries Preservation Act gives individuals and companies rights which this Bill does not give them. Parliaments must augment the common law ban on restraints of trade and monopolies. In a federation it is more than ever necessary that the people should have statutory rights. Individuals will lose their rights under the Australian Industries Preservation Act.

The Bill is designed, according to the long title, " to preserve competition ". In the first 4 of the 1 8 roneoed pages of his second reading speech the Attorney-General used the word " competition "17 times and the words " free enterprise " 6 times. He has worked on the simple supposition that if you say a thing often enough you begin to believe it yourself. This is part of Liberal folk lore, so one can pardon the Liberal Minister this self-hypnosis. I hope he does not expect this Liberal litany to lull too many others into as much gullibility about free enterprise and competition. This very Bill is testimony to the fact that business does not like competition. Business wants protection against insecurity and instability. The object of competition is to destroy competition. There is little competition over a very wide range of Australian industry and commerce. Prices are determined, not by competition in the market place, but by management in the board rooms. Although claiming to be a free enterprise Government - honorable members will pardon me if I give somewhat the same space to free enterprise as the Attorney-General gave - no government in Australian history has promoted government expenditure quite so much as this Government. The proportion of the annual gross national expenditure controlled by government has risen from 14.9 per cent. to 19.4 per cent., an increase of 41/2 per cent. during this Government's life, as against a rise of 1.9 per cent. - from 13 per cent. to 14.9 per cent. - under the Labour governments during the war and in the post-war period of the 1940's.

Those who benefit most from government regulation are the keenest to promote the myth of free enterprise. No man has profited more than R. M. Ansett from that regulation. To assist him the Government has destroyed almost all competition in the air, whether it be in routes, aircraft, fares or timetables. Yet Mr. Ansett is always to the fore in proclaiming the virtues of his private enterprise or free enterprise airline.

One of the fiercest opponents of this Bill has been the .Associated Chambers of Manufactures of Australia, but when the benefits of government regulation through the tariff are under discussion A.C.M.A. will be the first to hold out its hand. The tariff is a powerful instrument in regulating output, investment and prices. Between 55 per cent, and 60 per cent, of the 1,200,000 men and women engaged in secondary industry in Australia work in industries in which economic viability depends in varying degrees on tariffs. To give another, although I suppose, a minor instance, the drug industry preaches private enterprise in saving lives yet it depends for 90 per cent, of its ethical income on governments.

The Government has created and condoned restrictions of trade in many fields. The trading and savings banks are regulated and underwritten. We are urged to support the free enterprise banks. A free enterprise government has done a pretty thorough job on the free enterprise banks. There is no section of industry or commerce so regulated or so underwritten.

No industry is more highly regulated than most of the primary industries. The Australian Country Party thinks that competition and organised marketing are the same things. Thus we find embargoes on imports of dairy products, sugar and rice. We find quotas on the production of sugar and margarine. We have home price schemes, subsidies and numerous tax advantages. We do not have a free enterprise economy at all. In the major sectors there is no competition.

I have mentioned the extent of government regulation not to criticise particular regulations but to demonstrate three main things. First, the Government should come to grips with the real economy rather than the mythical economy of Liberal folklore. Secondly, those who benefit from government regulations should tone down their protestations about private enterprise. Thirdly, we must replace the vices of a regulated economy with the virtues of a planned one.

I have mentioned monopoly and the former Attorney-General mentioned monopoly, although, of course, the title of this Bill does not mention it. Manufacturing industry in Australia shows a greater incidence of monopoly than in most other countries. In one study it was found that one-third of manufacturing industry in Australia is highly concentrated and at least one-half is fairly concentrated. About 32 industries altogether were identified as highly concentrated. Among those in which only one company was producing the total Australian production were the refined zinc, pig iron, ball and rubber bearings, linoleum, industrial gases, sheet glass and writing paper industries. Those industries in which there were only two companies producing the whole output were the steel making and rolling, steel sheet and sugar refining industries. Industries in which there were three companies producing the total output were the matches, alkalis and chlorine, electric lamps, radio valves and television tubes and glass containers industries.

These monopolies are among the longer established of Australian industries and they are mainly Australian owned. The remainder of the 32 highly concentrated industries are oligopolised rather than monopolised. A small number are Australian owned, such as the brewing industry, the newspaper industry and the shipbuilding industry. The majority of our oligopolies, however, are subsidiaries of overseas firms. The most notable examples are the motor vehicle industry, the chemical industry, the tobacco, paint, soap, petroleum, agricultural equipment, electrical equipment, food processing and office machine industries. The large overseas firm has experienced little difficulty during the postwar expansion in establishing itself as one of the few dominating producers in these industries. Australia has twice the degree of concentration that exists in Britain and three times as much as in the United States of America, ft has a greater degree of concentration than there is in Canada.

If we are to promote the virtues of competition we have to envisage an extension of government enterprise. Public enterprise is one means, the chief means, of staving off or counteracting private monopoly in Australia and providing continued competition. Where we already have a monopoly in the field - and we have them in more fields than any other considerable trading or industrialised country has - there will be no competition unless the Government enters the field and provides the competition. Government enterprise is essential in such fields as shipping, drugs, steel and oil search. In some cases the Commonwealth Government could initiate the government enterprise by itself. In others it could establish an enterprise in co-operation with the States. In yet others it could do so in a consortium with a private corporation. The Commonwealth can do these things where it is so minded. There will be no increase in competition in many fields until there is more public enterprise or publicly sponsored competition.

The Government has failed to publicise sufficiently the extent and harm of restrictive practices. The present Attorney-General has been very reticent. Far from assisting public awareness of the problem be has discouraged public interest. Sir Garfield Barwick took the Parliament into his confidence and described the practices to a very considerable extent. He made many speeches outside the Parliament. He printed brochures which are available to members. He proposed that the register of agreements and practices should cover many more things than are covered by the present Bill - practices as well as agreements, services as well as goods and land. He proposed that it should be open to everybody with a legitimate interest. The present AttorneyGeneral has been forced to close the register to the public, even if people have a legitimate interest. There is no court which can make the register available to any company or any citizen, however gravely such a company or citizen is affected. The public has been left largely to make its own assessment.

We have one of the most highly monopolised economies in the world. There is no reason to believe that restrictive trade practices are not similarly extensive. As Sir Garfield Barwick pointed out, a ready measuring rod of the extent to which restrictive trade practices exist is the number of trade associations. It is estimated that we have 500 or 600 of them. A document prepared by the former Attorney-General and given to us in August 1963 detailed restrictive practices which had come directly under his notice or been reported by the Tariff Board and other official bodies of inquiry. The restrictive practices listed were extensive and serious. On 14th September I asked the present Attorney-General to bring the list up to date, and just over an hour ago he gave me the list. I am unable to present an extensive analysis of it. Since the former Attorney-General prepared his document there have been several Tariff Board inquiries and Professor Grant's Royal Commission of inquiry on restrictive trade practices in Tasmania. Professor Grant listed 22 practices of which seven will not be covered by this Bill except where they come within the monopolisation clause and four other practices which will not be affected by this Bill in any circumstances.

The Attorney-General also told me which of the practices listed by Sir Garfield Barwick were intended to come within the scope of his bill if there was or was not complementary State legislation. Of 18 practices which had come to his predecessor's notice the Attorney-General has told me that one will not come within the scope of this Bill and four are not intended to come within it except insofar as they come within the monopolisation provisions. Of the 14 practices which Sir Garfield Barwick pointed out had been reported on by public bodies, one is not intended to come within the scope of this Bill and three others come within it only in a minor way. So honorable members will see that insofar as we were informed of restrictive practices as distinct from monopolies in Australia there will be a very wide range which will not be covered by this Bill at all.

One of Sir Garfield Barwick's hopes was that the States would co-operate. He always emphasised the necessity of State legislation to complement the Commonwealth legislation. He was confident, he said, of securing it. There were a couple of urgency discussions introduced by members of the Labour Party in 1960. In each instance Sir Garfield Barwick either stressed that the States could deal with the matter themselves or that this Parliament could deal with it only if the States were to pass complementary legislation. When it was decided to bring in the Commonwealth legislation there was still the same emphasis on complementary State legislation. As Sir Garfield Barwick said himself on 27th October 1960 in this country, with only six States as distinct from 50 American States intrastate trade - that is, State jurisdiction - by far occupies the field. Accordingly, at that time he was thinking that if we could not have State complementary laws most of the field could not be covered by the Commonwealth at all. In March 1961 the Administrator when opening the Parliament said -

The Attorney-General has so far progressed in his investigation of this matter, and the Government has developed its thinking to the stage that consultation with the States will now be advantageous. Accordingly, the Government has commenced discussions with the governments of the States and will continue these discussions in an endeavour to evolve suitable legislation to operate over the whole area of trade and commerce in Australia.

The Prime Minister (Sir Robert Menzies) in his policy speech of November 1961 said -

We desire, in co-operation with State Governments, to do something to protect and strengthen free productive and business enterprise against monopoly or restrictive practices.

The Prime Minister made no such reference to the States in the policy speech that he made at the end of 1963. He has not carried out the policy that he put to the people at the end of 1961. The Governor-General told us in February 1962: "Discussions with the States are continuing ". The fact is that the Co-operation of the major States in the plan is certainly desirable, and if the Commonwealth cannot control horizontal restrictive trading agreements through the application of the corporations power, then the participation of the major States will be essential if the plan is to be fully effective. The volume of intrastate trade is far greater than the volume of interstate trade and moreover some restrictive agreements entered into in connection with interstate trade or foreign trade could be converted to a series of intrastate arrangements.

Sir GarfieldBarwick said when he outlined his proposals to the Parliament in December 1962 -

As a result of my discussions with the State Attorneys I have reason to believe that at least a clear majority of the State Attorneys would recommend to their governments the introduction of complementary State legislation to implement the scheme of legislation I describe.

In the question I asked the AttorneyGeneral, to which I have referred earlier, I asked him what consultations there had been with the States, what were the means and what were the results? He told me that these consultations were confidential. I therefore have to rely on statements made by State Attorneys-General. On the 9th of this month in the Victorian Legislative Council the Minister introducing the Collusive Practices Bill said -

It might have been expected that the Federal Government would have sought in advance the co-operation of the States on its legislation . I am quite sure that it was the intention of Sir Garfield Barwick, when he was Attorney-General, to seek the co-operation of the States. I was present at a meeting of Attorneys-General late in 1962 when Sir Garfield Barwick said he proposed that when the Federal Bill had been drafted he would show it to the State Attorneys-General so that action could be co-ordinated. Unfortunately, that has not happened as yet. The States did not see the Federal Bill before it was introduced into the Federal Parliament in May. In July, at a meeting of Attorneys-General, a request was made that the States either pass complementary legislation or refer their powers to the Commonwealth under the Constitution.

It is quite clear that the Government never thought there could be effective restrictive practices legislation unless there was complementary State legislation, and the only public statement that any AttorneyGeneral has made is that there has been no consultation to that end. Accordingly, if the Government is still of the same view as Sir Garfield Barwick expressed, and the Prime Minister, the Governor-General and the Administrator expressed, the fact is that there will not be effective restrictive practices legislation in respect of most trade in this country. Federal legislation will only cover a part of the field.

Quite apart from the matters which require complementary Federal and State legislation there are many fields of restriction in which the Commonwealth has complete constitutional power. It has power over trade with other countries. I shall refer to three fields of overseas trade in which restrictions occur. There are export franchises; there are shipping conferences; and there is the well known but small instance of the book boycott. The Minister for Trade and industry (Mr. McEwen) has stated that 700 Australian companies are parties to HOO agreements which restrict exports. Estimates have been made that 40 per cent, of Australian manufacturing industry is controlled overseas and most of it is postwar industry. We know from general observation that in Australia the motor vehicle, chemical, petroleum and aluminium industries are almost wholly owned overseas. Others in this group, although not so important industrially, are tobacco, paint, soap, industrial gases, rubber, ferrous pipes and tubes, lead, zinc and copper processing, wireless and television manufacture, cotton and synthetics spinning and weaving. In other industries the overseas component is less but is still quite significant. These are electric wires and cables, pharmaceuticals, office machinery, agricultural machinery, industrial equipment and certain lines of food processing. The only really major industries that are Australian owned are steel, paper, cement, glass and sugar refining. Only the steel industry ranks industrially with the most important foreign owned Australian industries. In the small Australian market the large overseas companies very effectively hold the commanding heights of the economy. In these circumstances, where our newest and biggest industries are owned overseas, the question of export franchises is a continuing burden to the Australian economy. It is a restrictive practice which should be curbed and it is within the Commonwealth's constitutional power.

Trie next example concerns the shipping conferences. I quote now from a publication brought out in April last year by the Department of Shipping and Transport in which it is stated - a conference is usually defined as an association of competing liner owners engaged on a particular trade route who have agreed to limit the competition amongst themselves. As a minimum they agree to charge freight rates or passenger fares for each class of traffic according to an agreed schedule of charges. To the agreement renouncing all forms of price competition is usually added an agreement to regulate sailings according to a predetermined pattern. A further step may be to add a full pooling agreement under which profits and losses on the trade covered by the conference are shared between members. . . .

In addition to internal arrangements, each conference may have agreements with shippers, that is, with its customers. Such agreements may take two forms, both designed to secure the continued custom of the shipper and to prevent the entry of outside competition. The first is known as the "loyalty rebate" or rather the deferred rebate system. Under this system the shipper who has not employed a non-conference ship for 6 to 12 months receives a refund at the end of the period of a percentage of his freight payments. In most cases the deferred rebate system constitutes a more substantial tie because the deferment of the rebate makes the entry of new shipping lines almost impossible. In the United States this system was outlawed by the Shipping Act of 1916. . . .

The second and newer type of tie is the contract or the dual rate system. Under this system the shipper enters into a contract with the conference, under which he agrees to send all his shipments by the conference lines. There is a difference between the contract and non-contract rates and in the U.K.-Australia trade, for example, it amounts to about 10 per cent., the contract rate being, of course, the lower. For shippers who do not enter into such contracts, the net contract rate is charged plus 10 per cent., less 10 per cent., six months deferred, if shippers have not sent cargoes by tramps during that period.

I quote the document at length because it has not been quoted by the present or the former Attorney-General. It is a Government document and presumably authentic. We are an island and one of the largest trading countries in the world. We do not operate a single scheduled overseas ship. Most of our trade with Britain, Europe, Japan, Malaysia, either coast of North America and to New Zealand goes by conference lines. The conferences engage in a restrictive practice which comes within Commonwealth constitutional power. There is no need for complementary State legislation to deal with this matter. 1 conclude with a well known example which is not very significant economically but which is significant to all people who write and perform in Australia. That is the book boycott. There has been a boycott since 1938. In that year, the Publishers Association of the United Kingdom decided to boycott any American books whose British Empire rights were not intact. The British Empire Market Agreement effectively restricts the entry of American books into Australia, as Australia is still regarded as part of the British Empire as at January 1947. We are a captive British market - a subject people - as far as Britain is concerned.


Mr Clyde Cameron - Does the honorable member mean to say that that position still applies?


Mr WHITLAM - Yes. It still applies. Not only was the entry of American books to Australia restricted, but also the United States, in effect, reciprocated by limiting Australian sales to the United States. It is time that in this, as in other fields, Australia asserted its rights to buy and sell in any market. The Federal Government possesses and should exercise the constitutional power to put an end to such restrictive practices imposed from overseas.

I come now to the abandonment of many of the proposals that Sir Garfield Barwick put to us in 1962. Up to this stage, I have dealt with the gaps in this Bill. It does not deal with monopolies which are so prevalent in Australia. It does not deal with these forms of restrictive practices in which the Government has condoned or created restrictions. It has not achieved or sought State co-operation to secure comprehensive national laws. It has not exercised the international constitutional powers of this Parliament. Quite apart from these gaps, however, which the Bill makes no attempt to cover, there is an abandonment of the proposals which Sir Garfield Barwick put forward. Not only has the Government failed to .secure the State laws which Sir Garfield said were essential and to exercise its own overseas trade powers, but it has also abandoned Sir Garfield's proposal to Parliament to ban monopolisation and destructive price cutting and to investigate mergers and resale price maintenance. This is all the more deplorable since the British Conservatives themselves have dealt with these matters. Sir Garfield stated his intentions quite clearly. The public was intended to believe that these would be carried out. Members of Parliament were entitled to believe that a law would be introduced in the terms which Sir Garfield outlined. The Attorney-General, in fact, has not adequately explained why these matters have been abandoned.

First, there is the abandonment of Sir Garfield's proposal to make inexcusably unlawful the practice of persistent price cutting to drive out a competitor. This was to be prohibited by Sir Garfield. It is merely examinable now. The Attorney-General has not given any explanation for the change. Large companies, particularly Australiawide companies, can easily destroy a small local company through price cutting. This has been described as a big business Bill. The only qualifications one needs to make is that big business, after reading the Bill, does not think that the Government means business. Very much solicitude has been shown in the Bill for large firms. Very little solicitude has been shown for the small firms. This Bill will do very little to preserve their service to the public or to keep them alive. Again, there is the question of monopolisation. The Attorney-General is no longer making this, as Sir Garfield Barwick intended to make it, inexcusably unlawful. It is merely to be examinable.

I come, now, to the two proposals which are not even mentioned in the Bill. The two earlier matters I have mentioned as being abandoned have been taken from the inexcusably unlawful list and placed on the examinable list. But the other two matters have been taken out altogether. I refer to resale price maintenance and mergers. Resale price maintenance prevents price competition in the branded goods to which it applies. In general, it raises the level of prices and profits. It is one of the most common forms of price fixing. It is designed principally by retailers to protect their margins from competition. Manufacturers also have an interest in resale price maintenance, particularly if they feel that price cutting will reduce the status of their goods. In Great Britain, a survey has shown that 40 per cent, of consumer goods were subject to some form of resale price maintenance. The percentage in Australia could well be greater. Earlier this year, Professor Grant reported to the Tasmanian Government as a royal commissioner on prices and restrictive trade practices. Two royal commissions have been held in recent years into restrictive practices. One was appointed about seven years ago by the Labour Government of Western Australia and the other reported this year to the Labour Government of Tasmania. Professor Grant reported as follows -

Resale price maintenance applies to the salp of bread, malt liquors, electric lamps, tyres and tubes, automobile parts and accessories, books, sports goods, hot water systems, cartridges, paint, cement, steel pipe, sheet steel, hard board, plywood and most hardware products, cigarettes and tobacco, pharmaceutical goods and toilet preparations, branded footwear and many clothing and drapery items. This list is far from exhaustive, but it indicates clearly that in a significant segment of wholesale and retail trade the seller is not free to set his own prices and hence price competition is non existent.

The Attorney-General gave no reason at all for withdrawing this matter from the proposed restrictive trade practices legislation proposed by his predecessor three years ago. It is not impossible or even difficult to draft such legislation. The Conservative Government in Britain did it a year ago. Mr. Heath, the present Leader of the Opposition in the British House of Commons, introduced the legislation. While there were redoubtable efforts made to thwart it in Great Britain, the Conservatives sat firm. It is now established. It is now operating satisfactorily. Sir Garfield Barwick promised this provision to us three years ago. The Attorney-General has abandoned it. Why?

Provisions relating to mergers have also been abandoned. Sir Garfield Barwick stated very properly in 1963 in the G. C. Wood Memorial Lecture -

Size does not always bring efficiency. Not infrequently it tends to destroy it.

He was countering the argument that mergers will necessarily bring about economies of scale. We are not dogmatic that this is so or that the contrary is so. But quite clearly Sir Garfield Barwick's proposal that mergers should be investigated and that they should be held up for a certain period of time if more than £250,000 is involved should still be carried out. The AttorneyGeneral referred to this in a very brief form in his speech. Mergers are a daily occurrence. They are often a substitute for an agreement. Control of such practices could be an invaluable way of regulating the structure of the economy, which is already highly monopolistic. Some company take overs have desirable effects; some are unavoidable - for instance, taking over an ailing company in times of high share prices. The incentive for takeovers increases as share prices increase, as shown in 1.959 and 1960. In 1959, 75 public companies were absorbed. They included companies dealing with coal, hardboard, radiators and constructional steel. The concentration of control through mergers can lead to profiteering, but more probably it leads to a laxity of organisation and technique.

The Government has introduced legislation, and amended it on several occasions, to prevent mergers in the television field.

Merger controls have operated successfully in Canada and the United States. They were introduced this year by the Wilson Government in Great Britain and the Conservative Opposition did not oppose the legislation. It is perfectly feasible to have such control. Sir Garfield Barwick promised it in his statement to the House in December 1962. He said -

It will be obvious enough, and, indeed, experience abroad has demonstrated, that where two. or more may not lawfully agree to engage in restrictive practices} they may, by merger so as to become one entity, do the very thing that was forbidden to be done by agreement . . . But it would, in many instances, be preferable to intercept an intended aggregation, whether of assets or of proprietorship, where it was but a substitute for an agreement to carry out a restrictive practice or where it was itself a mechanism to reduce competition or to take a step towards ultimate monopoly whether of supply or of demand.

The scheme I propose would seek to deal with the situation by providing an opportunity for intervention by the commission, established under the act, through the registrar, before the merger took place.

The present Attorney-General says that the problem of mergers is too difficult. In August, the British Parliament brought into operation such an Act. Sir G --field was keen on this proposal. In a paper he circulated and a speech he made at the Hobart Legal Convention in January 1963, he reiterated that he proposed to bring in legislation to investigate mergers. They have been investigated by the British - 'actually, by the Conservatives. Lord Poole, their chairman, presided over a committee that inquired into mergers and about that inquiry Professor Brunt has had this to say -

An advance clearance procedure is therefore advocated with the authorities given the right to hold up a merger for, let us say, six months. This in itself is not especially shocking.

As the Poole Report of the British Conservative Party observed, "most mergers are in fact under discussion for some time." Thus advance notice of all mergers above a certain value could be lodged with the Registrar.

She added -

The collection and presentation of evidence on these matters should not take an inordinate amount of time. Quoting again the pithy Poole Report: " If it were really impossible to tell the probable results of a merger, mergers would never take place. We cannot accept the argument that those concerned can estimate the commercial consequences but nobody can forecast the consequences to the public interest

The effects on the public are largely determined by the commercial consequences".


Mr Cope - Is Lord Poole a left winger?


Mr WHITLAM - Among Australian Conservatives, he would be. The British Conservatives accept the need for control of mergers; but the Attorney-General has abandoned his predecessor's promise to us and to the public three years ago. Mr. Speaker, I move -

That all words after "That" be omitted with a view to inserting the following words in place thereof: - " this House notes with approval that, in response to public pressure, the Government has introduced this limited Bill but deplores: -

(1)   the Government's failure to hold a referendum, as unanimously recommended by the Joint Committee on Constitutional Review in its reports presented to the House on 1st October 1958 and 26th November 1959 to give the Parliament power to make comprehensive national laws with respect to restrictive trade practices; and

(2)   its abandonment of a substantial part of the proposals of the former AttorneyGeneral, for legislation on restrictive trade practices and monopolies, as outlined to the House on 6th December 1962 particularly with respect to resale price maintenance, persistent price cutting, monopolisation and mergers."







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